Japanese Messaging App Line to Launch Own Blockchain

The Tokyo-based company aims to support dapps with own blockchain in near future

by Maya Bogdanova
25 April • 2,5 min
In Tech

Japanese messaging app provider Line plans to launch a custom blockchain aimed to bolster the development of decentralized apps (dapps) for its platform, the company told a developers event in Seoul on Friday.

The plan was revealed as part of Line’s technology roadmap for 2018. The group’s Chief Technology Officer, Euivin Park, said that the company was working on building a token economy by adopting blockchain technology into Line’s various features and opening dapps based on “incentive-type information services”. The messaging giant also plans to help “accelerating the development of dApp services outside of the LINE platform” and “develop its own blockchain mainnet in the near future”. To achieve this, Line is setting up developer bases and speeding up talent acquisition in Japan and South Korea, as well as other parts of Southeast Asia.

The news comes days after Line established a blockchain subsidiary based in South Korea. The affiliate, called Unblock, will focus on blockchain technology research and development.

Back in January, Line also announced the launch of a fintech subsidiary, Line Financial Corporation. The new business was set up to provide solutions for exchange and transactions in virtual currencies, loans, and insurance via the Line app. At the time of the announcement, the messaging giant also said it will launch a cryptocurrency exchange to be available through its Line Pay app. The project has already been submitted for licensing with Japan's Financial Services Agency (FSA).

Line is not the only messaging app provider initiating a blockchain move. South Korean industry peer Kakao Corp. announced in March its own blockchain subsidiary in Japan called Ground X. Around the same time, Russian encrypted messaging service startup Telegram Messenger raised USD 850 million in an Initial Coin Offering (ICO).

Line is owned by South Korean Internet search giant Naver, but established its base in Japan. Both nations have emerged as two of the leading players in the Asian cryptocurrency market, following China’s regulatory clampdown last year.

blockchain

Japan is estimated to have the second largest crypto user base in the world after the US, and has recognized Bitcoin (BTC) payments since March 2017. The country’s FSA started issuing licenses for crypto exchanges in September. However, following January's USD 532 million hack of Japanese exchange Coincheck, stricter regulation and inspections by FSA are changing the cryptocurrency landscape in the country.

The South Korean crypto user base comes in third place worldwide and also faces tightening regulations. The government banned all ICO activities in the country in September 2017 on the basis of “increased risk of financial scams.” The authorities have also banned foreign speculation on Korean crypto exchanges and ended the practice of anonymous cryptocurrency trading in the country.